RTX Corporation (RTX) — Equity Initiation Report
Rating: Outperform
Time Horizon: 12–18 months
Coverage Currency: USD
Company Snapshot and Key Financial Metrics
Q1 2026 vs Q1 2025
| Metric | Q1 2026 | Q1 2025 | YoY Change |
|---|---|---|---|
| Net Sales ($M) | 22,076 | 20,306 | +9% |
| Operating Profit ($M) | 2,555 | 2,035 | +26% |
| Operating Margin (%) | 11.6 | 10.0 | +160 bps |
| Net Income Attributable to Shareholders ($M) | 2,059 | 1,535 | +34% |
| Diluted EPS ($) | 1.51 | 1.14 | +32% |
| Adjusted EPS ($) | 1.78 | 1.47 | +21% |
| Operating Cash Flow ($M) | 1,855 | 1,305 | +42% |
| Free Cash Flow ($M) | 1,309 | 792 | +65% |
| Segment Operating Profit Margin (%) | 12.6 | 11.2 | +140 bps |
| Backlog ($B) | 271 | 217 (Q1 2025) | +25% |
| Book-to-Bill | 1.14 |
Segment Breakdown — Q1 2026
| Segment | Net Sales ($M) | YoY Growth | Adj. Operating Profit ($M) | Adj. Margin (%) |
|---|---|---|---|---|
| Collins Aerospace | 7,602 | +5% | 1,298 | 17.1 |
| Pratt & Whitney | 8,173 | +11% | 711 | 8.7 |
| Raytheon | 6,945 | +10% | 845 | 12.2 |
Key Growth Drivers and Investment Thesis
| Driver/Thesis | Details |
|---|---|
| Robust Backlog | $271B total backlog (+25% YoY), with $162B commercial and $109B defense as of Q1 2026. |
| Defense Demand Acceleration | Strong U.S. and international demand for munitions, missile defense, and air dominance. |
